Grain Storage: Advantages To On-Farm Grain Bins

Storing grain beyond harvest is a commonplace practice among operators in today’s agriculture industry. Major reasons for doing so include:

• Flexibility in when and where the crop is sold.
• Storing grain can help you capture the “carry” in the market.
• Less then ideal weather conditions during harvest season.
• The ability to conditioning grain for maximum value.
• Grain may be used gradually throughout the year for livestock feed.

Building storage bins on a farmstead has, traditionally, been favored because of the maximum flexibility and control the operator has over the price the crop is sold at. This, of course, is a gamble and crop prices may not increase after harvest season.

Another advantage to on-farm storage bins is the ability to condition your grain before selling it. If “wet” grain is brought to an Ag cooperative you will receive a decrease in value of your commodity. You can lose anywhere from .10-.20 cents per bushel.

For example, if Farmer brought in 50,000 bushels of wet grain in from the field, and gets docked .20 cents per bushel you are looking at a loss of $10,000 on 50,000 bushels. If Farmer stored the grain in an on-farm grain bin and conditioned the grain, they may gain $9000 of the same 50,000 bushels—considering there is always some dockage applied. Now take this example and put the numbers to it. The money you gain from six years of this practice pays for the grain system. Match that with the ability to watch the market and sell when prices are higher than at harvest time and you now have paid for this bin in 3 years or less (depending on markets).

This in turn also gives the farmer the ability to harvest earlier and dry their commodity. The farmer isn’t waiting until the fields dry enough and have the risk of the weather changing again. At this point you may be running the risk of sprouting and molding on your grain, which again, reduces your profit.

This has happened in Idaho recently. The crops were nearing harvest and Mother Nature has continually rained sprouting the barley. Some of this barley is contracted with Anheuser Busch; farmers are being told they have to store their crops for a minimum of 60 days before Anheuser Busch representatives will come out to test the barley to see if it meets their standards. If you don’t have a grain system available not only will you have to pay to rent space and conditioning fees, but you may not be able to sell your crop in the end.

Having on-farm storage has advantages, but like most things these systems also have their downsides. One of the most obvious is trucking the crop from the field straight to the elevator is a time saver. You won’t spend time later filling the trucks a second time, and then hauling to the elevator, which has addition fuel and manpower costs.

Depending on your local Ag Cooperatives, storage rates can be reasonable, as well as saving you the cost of an on-farm system. There are definitely years that the crops are drying perfect, prices are right, and elevators have room which all make it more economical to take your crop straight in.

With farmers getting more bushels per acre storage is a major topic that must be considered whether you choose on-farm storage or coops.